Monumental bitcoin hit: what happened?
The price of bitcoin sinks today around 5% and quotes at $ 9,500, which chains a four-session downward streak in which 20% has plummeted, losing 10,000 dollars again. A few days ago, the digital currency moved at $ 12,000 and it seemed that the comeback to the highs of the year was something done, but a host of circumstances have ruined the escalation. what happened?
First, bitcoin benefited from the decision taken by China last week to devalue the yuan above the 7 units against the dollar, which forced many holders to seek refuge in the digital currency. Therefore, the recent recovery of the yuan, since it has been known that China and the US will resume talks in two weeks, would be a factor that plays against bitcoin.
To all this, the added problem of the stock market storm that has been unleashed this week has strongly punished all risk assets, and that does not exclude bitcoin. “Predictably and reasonably, bitcoin has returned much of last week’s profits, and now it is right where we started,” says Jeff Dorman, manager of the Arca firm, Bloomberg reports.
The bearish reaction is serious and worrying, mainly because it throws one of the most used arguments by the defenders of the digital currency, which is none other than the negative correlation with US stocks, as proof that investors resorted to Bitcoin as a refuge That narrative is falling apart this week as the inverse relationship erodes.
Dorman believes that “it is impractical to believe that all market participants are using bitcoin as a refuge currency,” and therefore, they are not selling it when this wave of risk aversion arrives. Because in fact, sales are getting worse, and since bitcoin is small in relation to the entire market, “it doesn’t take much to move it from one place to another,” says Dorman.
The golden dream of the first ETF
On the other hand, it has been known that the US market regulator, the SEC, has delayed until autumn its expected decision to approve (or ban) the first ETF or quoted fund denominated in bitcoin, an opinion that was planned for this month of August. This is the golden dream of bitcoin enthusiasts, the definitive boost that would trigger the price, but the decision does not arrive, and has already been delayed several times.
On the SEC table there are three different proposals from as many ETFs. The agency’s new deadlines for deciding on a bitcoin ETF’s plans are September 29 for the Wilshire Phoenix fund, October 13 for Bitwise and October 18 for Van Eck and SolidX.
Bitcoin ETFs have not had good results in the SEC so far. Supervisor members rejected last year the only bitcoin ETF proposal, with the sole support of Republican Hester Peirce.
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